The supplier review should be included in the retailer’s independent financial probe into how it came to overstate its half-year profits by up to £250M.
“I have requested that compliance with the Groceries Supply Code of Practice is included in the scope of the internal investigation and I have asked to be notified if Tesco starts to find practices which might breach the Code,” Tacon told an audience at the Processing and Packaging Machinery Association Show in Birmingham today (September 30). “The GCA will take a decision on next steps based on the evidence.”
A Tesco spokeswoman told FoodManufacture.co.uk: “We’ve already announced that we’re undertaking a thorough investigation and will continue to ensure that we are compliant with the Groceries Code.”
Curbing forensic auditing
Tacon also updated her audience on progress towards curbing forensic auditing. That is the process where some supermarkets review old accounts with suppliers stretching back many years, before demanding money retrospectively to cover so-called discrepancies.
“I have asked all the retailers to inform their suppliers in October about their forensic auditing policies,” she said. “This is an example of how I want to achieve swift progress by informal methods on issues faced by many suppliers. But let me be clear that I also have the power to carry out investigations and impose sanctions, including fines in the most serious breaches of the code.”
She also repeated her plea for suppliers to deliver hard evidence – such as financial and contractual documentation and notes of conversations – of alleged retailer abuses. Tacon again reassured suppliers their identities would be protected..
‘Give me the tools’
“I don’t want to interfere in your commercial relationships with retailers but if you know of a practice that is not only affecting you but is also likely to affect others, isn’t that a justification to tell me so that I can take action?”, said Tacon. “Give me the tools and I can do the job.”
The Groceries code boss said she relied on suppliers, trade associations and other organisations and individuals with evidence about potential breaches of the Code to provide evidence to the GCA.
“Without the evidence I am powerless to act; without a strong body of fact-based information I cannot launch an investigation and without detailed data any investigation I launch will not be able to prove any breach of the Code has taken place.”